Should an employer’s financial circumstances be relevant when considering the period of reasonable notice to which a wrongfully dismissed employee is entitled? This question was raised on appeal in Michela v St. Thomas of Villanova Catholic School, 2015 ONCA 801.
As calculating the appropriate notice period is fact-specific, the argument that an employer’s financial circumstances should be considered in the notice calculation is an intriguing one. Previously, the recognized relevant factors in determining notice periods focused on the circumstances of the employee rather than the employer. These include the character of the employment, length of service, age, experience, training, qualifications, and availability of similar employment. The motion judge in this case had considered the employer’s financial circumstances to be part of the “character of the employment”.
The ONCA determined that the motion judge had erred and that previous case history does not support this interpretation. An employer’s poor economic circumstances do not justify a reduction of an employee’s notice period. This decision has been broadened in the recent decision Nielsen v Sheridan Chevrolet Cadillac Ltd., 2016 ONSC 1843 which states that even where there is evidence that the employer’s financial difficulties are widely known and employees were aware of intended workplace closures, the employer’s economic circumstances should not be considered in calculating the length of notice that an employee is entitled to.